The New Business of Banking

Some banks won't even survive the weakened global economy – how many will thrive? by Matthew Barnason

Global competition, customer attrition, and the pressures to reduce operating costs, manage risk and achieve Basel II compliance have created a harsh environment for the world's financial institutions. In the weakened global economy, banks large and small have seen their profits slide, sometimes by alarming margins.

When Tokyo stocks hit a 19-year intra-day low on Oct. 3, 2002, Reuters reported that "shares in major banks and some of their debt-ridden clients [were] hurt by fears that the government would impose tough measures to sort out the bad-loan problem."

Masanori Hoshina, head of global portfolio trading and marketing at BNP Paribas, told Reuters columnist Risa Maeda, "Now that a hard-landing scenario is looming, the market and banks should both be dealt a blow. But the banking sector will bleed the most."

Whether in London, New York, Frankfurt or Shanghai, financial institutions have suffered. But the future needn't look so bleak.

Banking executives have been forced to rethink their strategies and devise new business models to operate competitively in a high-tech, multichannel banking market. As the sector recovers, senior bank executives are integrating carefully selected technology to improve customer service, empower their work forces and increase core operating efficiencies. This prudent use of technology is designed to increase revenue and control costs, producing sustained growth and profitability.

Building on more than a quarter-century of domain experience, SAS has created SAS Banking Intelligence Solutions, a software suite that addresses business needs specific to the banking industry. In building the solutions, SAS has drawn on the knowledge and experience gained from working with 1,100 banks worldwide, including one-third of the world's largest financial institutions. And as a company that reinvests 25 percent of its annual profits back into research and development, SAS is in an excellent position to create such industry-specific solutions.

Tailored to meet the unique business intelligence needs of the banking industry, SAS Banking Intelligence Solutions enable banks to implement effective business strategies, maximize profits, retain and grow customer accounts and execute marketing campaigns. The initial set of SAS solutions combine award-winning technology with banking-specific analytical and dimensional models for customer attrition, credit scoring, customer behavior and marketing analysis, along with campaign planning, management and execution – all integrated through a banking-specific enterprise data architecture. An enterprisewide business scorecard with banking-specific key performance indicators (KPIs) provides a single strategic view of the enterprise to help drive business forward.

SAS Banking Intelligence Solutions:

• Support a planned, strategic, focused and phased approach.
• Lower project risks by using pre-built models for success.
• Reduce the time to ROI by offering rapid implementation.
• Contain proven, banking-specific business solutions for key issues.
• Provide a single version of the truth through an integrated data architecture.
• Offer the precision of prediction and quality of analytical intelligence that no other vendor provides.
• Are future-proof – SAS has the most flexible architecture available.

Intelligence Architecture for Banking – One of the key challenges for banks today is to create a single view of the enterprise and of customers across multiple channels. SAS leverages the investments banks have already made in operational systems and applications by adding a unique layer of intelligence. SAS' intelligence architecture for banking includes predefined logical and physical data models that integrate the critical information needed from across the enterprise to support key business decisions. This banking-specific architecture, the most extensible environment on the market today, allows quick responses to changing business needs and realizes value in each step of the intelligence creation process.

SAS Strategic Performance Management for Banking – For competitive advantage, banks today need the ability to quickly translate business strategies into actions that can be measured and monitored throughout the organization. SAS Strategic Performance Management for Banking includes a bank-specific scorecard that allows users to customize key performance indicators (KPIs). It also features a "dashboard view" for delivering up-to-date intelligence across the entire enterprise. Whether the intention is to create a more customer-centric organization or to measure profitability in supplier, organizational and customer elements, SAS Strategic Performance Management for Banking is designed to make strategic vision a business reality.

SAS Marketing Automation for Banking – Banks worldwide are seeking to increase the efficiency and effectiveness of their marketing campaigns. SAS Marketing Automation for Banking integrates leading-edge SAS software with a predefined data environment for superior marketing analytics and campaign management. This enables banks to execute highly targeted marketing campaigns that yield higher response rates. The solution offers rules for retention, loyalty, customer acquisition, development, activation and reactivation.

SAS Customer Retention for Banking – The need to retain profitable customers has never been more important. SAS Customer Retention for Banking enables banks to predict which customers are most likely to take their business elsewhere, as well as what key factors will influence their decision. Based on customer intelligence, valuable customers can be effectively targeted before they leave, resulting in measurable benefits to the bottom line.

SAS Credit Scoring for Banking – Identifying existing and potential customers' creditworthiness is a powerful way to reduce costs. SAS Credit Scoring for Banking provides application scoring and behavioral scoring for credit cards, personal loans and mortgages to assess risk within a bank's existing customer base and to provide a basis for scoring potential new customers.

SAS Anti-Money Laundering – A bank's ability to easily identify and reduce fraud and comply with government regulations can help it maintain a strong business reputation and protect shareholder confidence. Built on more than a quarter-century of experience in the banking and financial services industry, the SAS Anti-Money Laundering solution offers an integrated and open-ended architecture that enables banks to gather information from across data sources, transform the appropriate data into usable knowledge and accurately report on the results. No other vendor offers the power and flexibility of this solution.

SAS Risk Management for Banking – SAS Risk Management for Banking allows banks to perform enterprise risk management. The solution also provides an open, flexible and extensible means of measuring and managing market, credit and operational risk in the manner most appropriate for an institution's unique needs. These capabilities allow banks to meet regulatory requirements like those imposed by Basel II.

"SAS' newest industry-specific solutions underscore the company's continued success in calibrating its powerful analytic and data management software with the changing needs of enterprises," says Bob Moran, vice president and managing director for data knowledge and analytics at Aberdeen Group. "The SAS Industry Intelligence Solutions clearly demonstrate a strong commitment to provide software that speaks the language of specific industries and that solves their unique pains."